Teacher rebellion blocks federal takeover of yeshiva

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NEW YORK — Officials of the Yeshiva of New Square in Rockland County, just northwest of New York City, have left 2,000 Chassidic students out in the cold after shutting down their school system rather than cooperate with a federal takeover.

The hurried closing of several elementary and high schools occurred just four days after a revolt by about 50 yeshiva rabbis, during which they physically intimidated a federally appointed school administrator into emptying the yeshiva's bank account so they could be paid.

The shutdown came just two weeks after U.S. District Court Judge Leonard Sand appointed a federal receiver to take charge of the business operations of the yeshiva — believed to be the first such action against a Jewish school in U.S. history.

Sand ordered the takeover after trying for nearly 18 months to get yeshiva officials to comply with a federal subpoena to turn over numerous bank and financial records in connection with an ongoing criminal probe of allegations of misuse of U.S. education funds and income tax fraud.

The school's failure to cooperate led Sand to impose a fine of more than $3 million, a sum Sand and officials at the U.S. Attorney's office in New York said they are determined to recover despite the latest turn of events.

Federal officials said they were caught off guard by the shutdown.

No one in the Chassidic community claimed responsibility for the action.

The school closure, revealed by yeshiva attorney Gerald Shargel at a Jan. 9 federal court hearing, is the latest twist in the bizarre case of the Yeshiva of New Square.

The yeshiva is the school system for the 5,000-member village of New Square — the nation's first all-Orthodox municipality, established by Skverer Chassidic Jews from Ukraine.

"It's over. The Yeshiva of New Square will not open again," Shargel said in an interview after the proceeding.

But he said it may be resurrected under a new name.

Sources said Skverer leaders so despised Sand's appointment of federal receiver Melvin Stein, an Orthodox Jew and former federal prosecutor, to run their mismanaged yeshiva's business operations that they opted to close.

"Clearly this was a tactic to get out from under the government," said one observer close to the case.

In fact, the Skverers had gone so far as to obtain a halachic (Jewish legal) ruling from "the Supreme Rabbinical Court of Jerusalem" last month that said the Skverers "are not allowed under such circumstances to comply" with the government's request to turn over financial information.

Shargel said putting the school under federal receivership caused teachers and donors to "lose faith," and in turn caused financial donations to dry up so that the school could no longer pay its staff or provide lunches to students.

However, a rescue plan for the Skverer students and teachers already is under way.

A group of prominent New York City leaders, who are Orthodox Jews, proposed to operate the yeshiva under a new incorporation.

The proposed new board of directors includes such influential New York City names as former city Housing Commissioner Abraham Biderman, attorney and Housing Authority Commissioner Kalman Finkel and builder George Rieder.

The new school would have a new name and administration but the same facilities.

Rounding out the board are accountant Chaim Herbert Leshkowitz and Yeshiva University High School teacher Rabbi Mayer Schiller.

Schiller, who described himself as a Skverer Chasid who lives in the community, said he hoped that the new school system would be up and running "as soon as possible," but he could not provide a firm date.

He said he expected most of the teachers to be the same as those who taught at the now-defunct yeshiva entity.

Some of those teachers will no doubt be the same individuals who participated in a fracas at the yeshiva Jan. 2 against Rabbi Eliyahu Safran, appointed by Stein to be the administrator for the now-defunct yeshiva.

Safran, in a memo read to the court, said he was trapped in an office fearing for his safety while a mob of rabbis blocked the doors, threatening that they would not let him leave unless he signed their paychecks.

Within a short time, Safran was coerced to sign more than $75,000 worth of checks for 50 of the 100 faculty members — exhausting the yeshiva's bank account.

In response to this incident, Sand ordered Jan. 9 that no teachers who cashed the "extorted" checks would receive any future payments from the yeshiva unless through a written court order.

Sand also ordered that yeshiva checks must have two signatures. He recommended that U.S. Attorney Matthew Fishbein prepare a criminal complaint against the rabbis, which he noted could include charges of extortion and conspiracy.